More help from me Friends NEEDED/FHA

[121804]

Originally Posted by SoFLGal

Did you earn it yourself, or did Dear Ole Dad or Aunt Margaret give it to you?
If they see a large deposit, they will need it to be sourced. This is to rule out money laundering, etc.

We are going through refi (6.75 to 5.25 We close on Sat...so friggin excited b/c we are looking at a $140/mn savings) on a 30yr conv. fixed and ran into this situation. This past year in a 30 day period we had to get a new furnace, my dh's car needed new tires, and I needed an emergency root canal. Obviously, the credit card took a huge hit. A family member was able to gift us cash in Oct to pay off the credit card & pay them back interest free.
We waited until all we needed to turn in were the bank statements from Nov-Dec in order to help the approval process move more smoothly.

And our broker basically said exactly what you stated...they see large deposits....it's a "red flag" and will be questioned. If you have such & such amount of money, why are your debts such and such or where did the money come from if your paycheck stubs show a specific amount & so on.

[Dreamy46]

Originally Posted by SoFLGal

It's not fraud. That's following their rules. If you have the money in the bank for 60-90 days they consider it yours. If not the it needs to be labeled as a gift.

I added to the post to say that. It's pretty cut and dry.

What you put on the post above is a whole different ball game. If a relative it willing to give you money toward a down payment on a purchase, so be it. I'm telling you how they classify it. You either have it for 60 days or get a gift letter. Straw buyers and all has nothing to do with what Oobie is talking about. I do agree though if she is not able to make the has payments then she shouldn't buy it but if a relative wants to give her some help, I don't see anything wrong with that.

As long as the deals happen, and everyone gets paid, it's all good right?

What happened to ethics? Isn't that why people in the biz get such a bad rap?

I would counter that the banks believe its yours money because they really believe it's yours, and intend for it to be yours.

The problem is you're hard pressed to find a mortgage broker that would raise his hand and say STOP, this isn't right, and I've now became aware of something that isn't right. Instead of telling you to come back when you've got your act together, it's "put the money in the bank months beforehand and nobody is none the wiser. This is how we get around these pesky rules designed to protect the taxpayers."

The problem is, the taxpayers are subsidizing that behavior in the form of bank bailouts, and the people that did it honestly have lost their butts from the folks who lied and went into foreclosure next door.

[SoFLGal]

Originally Posted by Dreamy46

As long as the deals happen, and everyone gets paid, it's all good right?

What happened to ethics? Isn't that why people in the biz get such a bad rap?

I would counter that the banks believe its yours money because they really believe it's yours, and intend for it to be yours.

The problem is you're hard pressed to find a mortgage broker that would raise his hand and say STOP, this isn't right, and I've now became aware of something that isn't right. Instead of telling you to come back when you've got your act together, it's "put the money in the bank months beforehand and nobody is none the wiser. This is how we get around these pesky rules designed to protect the taxpayers."

The problem is, the taxpayers are subsidizing that behavior in the form of bank bailouts, and the people that did it honestly have lost their butts from the folks who lied and went into foreclosure next door.

I'm not getting paid anything because I'm not involved in her deal. I'm just telling you how they look at it and I don't see anything wrong with getting a gift from a relative. Whether they have to write a letter stating or not. There are many more pieces to the puzzle. She would need good credit, the ability to pay back the loan, etc. All this has to do with getting a note saying it's a gift or not. It has nothing to do with fraud. It has to do with a letter or not.

[Big House]

Originally Posted by SoFLGal

I'm not getting paid anything because I'm not involved in her deal. I'm just telling you how they look at it and I don't see anything wrong with getting a gift from a relative. Whether they have to write a letter stating or not. There are many more pieces to the puzzle. She would need good credit, the ability to pay back the loan, etc. All this has to do with getting a note saying it's a gift or not. It has nothing to do with fraud. It has to do with a letter or not.

Exactly if the relative lends them the money, and everyone gets paid, there is no problem. A relative is vouching for the ability of the buyer to be able to meet the payment obligations. If the money sits for the term required by the agency, and is returned or gifted back, after the required term - it still demonstrates thier ability to pay, and the obligations are all satisfied. If something happens during the 4 month period, then the relatives funds may be at risk. There is nothing wrong or unethical satisfying the arbitrary requirements that the lender has set in this manner. And it is legal, ethical, and a positive thing for relatives to gift up to $10,000.00 each tax free, so the ability to do that - is acceptable. And if the term requirements say it needs to sit 60-90 days, that is a minimal amount of interest as well. Lets get real, no one is going to commit fraud helping a relative for couple thousand dollars money that needs to sit in an account for 4 months. Relatives have helped relatives aquire financing since the concept of making loans was developed.

[Dreamy46]

Here's an important read for you Oobie. The mortgage crooks are substituting the GFE (good faith estimate) form with worksheets to sidestep the new law I mentioned earlier:

"The idea is to eliminate some of the most controversial practices in mortgage lending -- the intentional or inadvertent underestimation of fees. Under the old system, some lenders lowballed their estimates to lure applicants away from competitors. In the end, unwary consumers were hit with eleventh-hour surprises at closings -- fees sometimes thousands of dollars higher than the initial estimates."

"So how have the first two weeks of the reforms been going? Not exactly as planned. Many loan officers and lending institutions are sidestepping the new, price-bound GFE by giving shoppers "worksheets" and "loan scenario" forms that come with no legal requirements for accuracy; these documents were not even contemplated under the reforms. In effect, they are substitutes for the new GFEs, wide open to lowballing and bait-and-switch games under the wrong hands."

"In the meantime, if you want hard and fast guarantees on fee estimates and you're serious about comparing competing loan costs, demand a GFE. If loan officers will provide you only worksheet estimates, be on alert: The lowest quotes you get may not be for real."

Mortgage lenders can sidestep new rules to prevent lowball estimates - washingtonpost.com